Live Oak Bank, based in Wilmington, North Carolina, has been the most active lender of SBA 7(a) loans for the sixth consecutive year, according to the U.S. Small Business Administration. The bank was the top lender by dollar amount during the SBA’s fiscal year that ended on September 30 and lent $1.8 billion to small businesses through the program, almost $50 million more than its closest competitor, Huntington National Bank in Ohio.
During this fiscal year, Live Oak approved a total of 1,215 SBA 7(a) loans nationwide. Although it had the most loans and the largest average loan size of the group according to the SBA, it did not have the highest number of loans nor the largest average loan size in terms of total dollar amount borrowed per loan.
A 7(a) loan is a primary business loan program offered by the SBA which can be used by small businesses for refinancing or acquiring real estate buildings as well as for short- or long-term working capital needs. The standard 7(a) loans typically have long repayment periods and low interest rates which make them an attractive option for small business owners looking to invest in their company without taking on too much debt risk. This is possible because the SBA reimburses a portion of the loan if a borrower defaults or cannot repay it, making it a less risky investment for banks like Live Oak Bank. In return, banks are charged a guarantee fee that is usually passed on to borrowers and is based on